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Govt Considers $142.9K Fine For Companies Failing To Comply With Aadhaar Act

Govt Considers $142.9K Fine For Companies Failing To Comply With Aadhaar Act

Government is considering to give more powers to UIDAI

Currently, UIDAI is not allowed to take actions again entities that do not comply with the Aadhaar Act

Planning to set up a UIDAI fund under the Aadhaar Act

The central government is reportedly considering introducing a civil penalty of INR 1 Cr ($142.9K) on companies that fail to comply with the provisions of the Aadhaar Act. It is also mulling a fine of INR 10 Lakh ($14.2K) per day in case of continued non-compliance.

Citing unnamed sources, a media report stated that the government is considering giving more powers to the Unique Identification Authority of India (UIDAI), as a part of the Aadhaar amendments. Currently, the Aadhaar Act does not allow the Aadhaar regulatory body to take action against the entities that do not comply with the Aadhaar Act.

The Centre is also planning to set up a UIDAI fund under the Aadhaar Act. It has also proposed to exempt the authority body from any taxes on income.

After the Supreme Court barred private companies from using Aadhaar data for customer onboarding, the government started looking for alternatives such as an ‘offline Aadhaar’ verification system which will operate on QR codes, or through XML format etc to help the process of electronic know-your-customer (eKYC). If these measures come into place, the companies will not have to seek biometric details of the users.

Some of the other proposals for the Aadhaar Act are :-

  • Any attempt to breach the Aadhaar database will be punishable by 10 years in jail rather than the current, three year punishment
  • Amendments in the Telegraph Act and Prevention of Money Laundering Act (PMLA) to allow for voluntary use of Aadhaar for opening bank accounts and getting phone sims
  • Minors who have been issued Aadhaar number will be allowed to withdraw from the biometric system as they turn 18
  • In that case, UIDAI  will have to delete all the biometric and associated information of the person
  • Provision to file an appeal before the TDSAT (Telecom Disputes Settlement and Appellate Tribunal)
  • Provision to appeal to the Supreme Court against the orders of TDSAT

In September 2018, the Supreme Court in its much-debated judgement, directed that Aadhaar details will be mandatory only for filing income tax returns and for the allotment of PAN.

It ruled that Aadhar data will not be necessary for the opening of bank accounts or getting sim cards. The top court had also struck down Section 57 of the Aadhaar Act which gave power to the private companies to demand Aadhaar details from its users.

However, though the judgement has been made, questions on how can Aadhaar be used legally still remain.

[The development was reported by ET]